Corona, Calif., rethinks citywide Wi-Fi plan

Corona, California is rethinking its citywide Wi-Fi project after MetroFi, the city’s partner, asked the city to pay at least $90,000 per year over 5 years for use of the network. Is this a trend among providers that promised to bear all the costs of deployment?Corona, California is rethinking its citywide Wi-Fi project after MetroFi, the city’s partner, asked the city to pay at least $90,000 per year over 5 years for use of the network. MetroFi asked the city to amend the agreement which requires MetroFi to set up a citywide Wi-Fi network at no cost to the municipality.

A number of cities such as Houston and Minneapolis have agreed to pay the citywide Wi-Fi provider a fee over the term of the contract, as the anchor tenant on the network. There are several ways to think of how cities and service providers can work together and benefit:

(1) In a suburb like Corona which is not densely populated and does not have a lot of tourists or business visitors, it is more challenging for a provider like MetroFi to cover its investment and running costs via advertising or subscriptions alone. To give it an extra incentive, it would need the city as an anchor tenant.

(2) In a densely populated area like Philadelphia or a place frequented by tourists and business people such as San Francisco, a provider will be able to cover its costs more quickly. There are enough people who work in the city and go to appointments in different locations, as well as visitors who need connectivity everywhere, that they would either purchase long and short-term subscriptions or view ads (on the free part of the network). A provider in such a municipality would not necessarily need the city as an anchor tenant, although in my opinion, the city can use the network for its own purposes and can pay for it out of cost savings and efficiency gains.

(3) Cities like Corona should think about how they can use the network to save money on telecommunications costs and to enable city workers to be more efficient. From the cost savings, they can pay a provider like MetroFi for their use of the network (in the same manner that they pay a DSL provider for bandwidth).

While it might be attractive to get someone else to pay for the city’s network, cities should heed a Dutch saying, “he who pays, decides”.

I would love to hear your thoughts on this issue.

Comments

  1. I think that providers are starting to realize that revenue projection for public access and advertising were inflated. These systems are a much greater benefit to Municipalities with respect to infrastructure and communication costs reduction. In the end, Municipalities are paying for these networks. Many of them are realizing this and planning budgets and applying for grants to pay for the network up-front. A typical tier 2 or tier 3 city can prove a ROI based on real ongoing expenses in 4-5 years. This is much cheaper than engaging in a 5-7 year anchor tenant agreement!

    Bill Milligan
    Director of Market Development, Muni Wireless

  2. Anthony McCray says

    I would concur with Bill Milligan’s comments and add that municipalites would benefit in the long run by a business model where their is shared cost ownership as well as shared operation responsibilites. This provides the muncipality with the power to define it’s requirements.

    In some cases like Corona California the muncipalities might take a closer look at the value added applications such as AMI, consolidation of picey wired backhaul cost, and access to hard to wire locations.

    Another thought is a partial deployement applicable to one’s budget. Coverage would be based upon the essential applications supporting Public/Private access. The key is that the deployement model support a cost effective, clear, and technically current path such as WiMAX.